Financial Crime World

Dominica’s Efforts to Combat Money Laundering and Terrorist Financing Face Challenges

A recent report by a global financial watchdog has highlighted several areas where Dominica needs to improve its efforts to combat money laundering (ML) and terrorist financing (TF). While the country has made significant progress in developing a robust national strategy and policy framework, there are still concerns about its ability to effectively identify and prevent ML and TF.

Comprehensive Risk Assessment Needed

The report notes that while Dominica’s National Risk Assessment (NRA) identified several areas of concern, it did not comprehensively assess the risks associated with:

  • Non-profit organizations (NPOs)
  • Legal persons
  • Virtual asset service providers (VASPs)
  • Cross-border wire transfers
  • The Country Brief Information (CBI) programme

An updated FI and DNFBP sectoral risk assessment is needed to enhance Dominica’s understanding of its ML/TF risk profile.

National Policy and Strategy Framework Needs Realignment

The report also highlights the need for a realigned national policy and strategy framework that takes into account the country’s TF risks and vulnerabilities. Specifically, there is:

  • A lack of clarity on how to continuously assess the TF threat
  • A need to identify training needs
  • A requirement to develop policies to address this risk

While Dominica has made significant progress in developing its legal framework, there is still a need for greater clarity.

CBI Programme Raises Concerns

The CBI programme, which allows foreign nationals to purchase citizenship and residency in exchange for an investment, raises concerns about the potential for ML and TF. While Dominica has implemented measures to prevent abuse of the programme, there is:

  • A need for greater transparency
  • A need for greater oversight

TF Risks Not Fully Assessed

The report notes that while Dominica has a strong legal framework for criminalizing TF, its NRA did not fully assess the risks associated with:

  • NPOs
  • Legal persons
  • VASPs
  • Cross-border wire transfers
  • Other sectors

This lack of understanding of TF risks is compounded by the fact that no TF cases have been prosecuted in the period under review.

Supervisors Need to Provide Guidance

The report also highlights the need for supervisors to provide guidance on TF requirements to financial institutions (FIs) and designated non-financial businesses and professions (DNFBPs). Specifically:

  • FIs have demonstrated an awareness of TF requirements, but there is still a lack of clarity on how they should implement these requirements.

Conclusion

While Dominica has made significant progress in developing its national strategy and policy framework, there are still several areas where it needs to improve its efforts to combat ML and TF. A comprehensive risk assessment, realigned national policy and strategy framework, greater transparency and oversight of the CBI programme, and guidance on TF requirements from supervisors are all necessary steps to address these risks.